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Message Boards Digest

October 14, 2020

Here are the most recently added topics on the BenefitsLink Message Boards:

Niceguymike created a topic in Correction of Plan Defects

Inclusion of Comp for Non-Participating Employer

"Client neglected to mention that the ownership for their company had changed to 50/50 between Owner A and Owner B. Further, Owner B owns another company 100% and the plan's census has 'always' included comp from this other company in calculating allocations. I don't think there is a controlled group, because identical ownership isn't greater than 50%; however, I think it wasn't appropriate to include comp from, essentially, an unrelated company (until 2019). I *think* what I need to do is amend their plan to include the other company as a participating employer back to at least 1/1/2019 and/or amend the plan to allow employees to participate through the comp from the other company. Your thoughts?"

1 reply   |    27 views   |    Add Reply
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BG5150 created a topic in Form 5500

Who Gets the SAR?

"Giving out the SAR today for the 2019 plan year. Who gets it? All current eligibles as of today and former employees with a balance as of today? New participants in 2020 will get it. All current eligibles as of 12/31/19 and former employees with a balance as of today? New participants in 2020 do not get it. As I understand it, former employees with no account balance at the time of distribution of the SAR do not get it."

0 replies   |    20 views   |    Add Reply

austin3515 created a topic in Form 5500

5500 Has No Audit Report But 'We're Working On It'

"I've seen auditors attach to the 5500 as the audit report a letter that basically says 'Hey. we're working on the audit.' The benefit of this approach (which is what I don't like about it) is the filing will be accepted without error. I think it's a little disingenuous. Although it looks like you're 'doing the right thing' by disclosing the fact that you are working on the audit, it has the effect of hiding the fact that you haven't done the audit. Do others recommend in favor of or against this approach?"

4 replies   |    60 views   |    Add Reply

Belgarath created a topic in Retirement Plans in General

Death Benefit Payout Periods under SECURE Act

"I haven't seen a lot of discussion of this issue. That's likely because of at least two reasons: First, in DC plans where most people terminate and take a full distribution on or before NRD, there are thankfully relatively few death distributions. Second, COVID has thrown everything into a tizzy this year. At any rate, recordkeepers are beginning to send out their 'default' provisions, so it seems like a good time to think about the subject in more detail. My own preference, from a plan administration point of view, and for most of our clients, is the desire to get such amounts paid out of the plan sooner rather than later. Beneficiaries GENERALLY want the full lump sum amounts ASAP (whether in cash or rolled to an IRA) so I'm really talking about a limited number of situations. Do you plan to allow the full range of allowable distribution options, or restrict it to a lesser time period (for example, the current 5-year limit)?"

1 reply   |    27 views   |    Add Reply

nerd-party-administrator created a topic in 401(k) Plans

Can DFVCP Filing Fees Be Paid from Plan Assets?

"Does anyone know if DFVCP filling fees can be paid to the DOL from plan assets (ideally, forfeitures), or do they have to be paid directly by the plan sponsor?"

2 replies   |    45 views   |    Add Reply

TPApril created a topic in Distributions and Loans, Other than QDROs

Money Sources and Taxes -- Does It Matter?

"Takeover 401k PS plan. Never had a TPA apparently. Never has been tracking of balances by money source (401k & PS only). Terminated participant wants to take a full distribution. For tax purposes upon distribution only, does it matter that there are no defined balances between sources?"

0 replies   |    9 views   |    Add Reply

Dennis G. created a topic in Distributions and Loans, Other than QDROs

Increased Loan Limits Under the CARES Act -- Deadline Still September 27?

"Have the increased loan limits under the CARES Act has been extended past September 27, 2020?"

0 replies   |    5 views   |    Add Reply

Teresa F. created a topic in 401(k) Plans

Controlled Group of Three Sponsors; Same Plan But Varying Entry Dates

"A client just purchased/re-organized various companies so that we now have a controlled group due to family attribution.

  Company A & B Company C
Dad 51% 100%
Son 49%  

Currently we have three different plans with different entry dates, all are safe harbor match plans.

A-- after 3 months immediate entry at the beginning of the month

B-- immediately upon hire

C-- 1 year, due entry

All companies have roughly the same number of employees -- 5 to 10.

The client is resisting the use of a single plan document with the same entry date for all participants.

Won’t the different entry dates most likely cause testing to fail? Which tests will most likely fail? Am I required to have only one plan document?"

0 replies   |    8 views   |    Add Reply

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